ADDRESS BY THE HON. JOHN DALLI, MINISTER OF FINANCE

ADDRESS BY THE HON. JOHN DALLI, MINISTER OF FINANCE, AT THE INTERNATIONAL LAW FIRMS CONFERENCE. PORTOMASO SUITE, HILTON HOTEL

(ILF stands for International Law Firms. It is an association of law-firms with an international practice represented in 45 major countries. ILF is represented in Malta by Galea Salomone & Associates.)

It is indeed a pleasure for me to address the closing dinner of the ILF Conference in Malta. I trust that despite your hectic conference schedule, you have had some time to see our island and to hear about the increasing number of opportunities available in our developing financial centre.

Malta's geo-strategic location has always been put to good use for the provision of services. Historically the Phoenicians used Malta for trading services, the British for maritime services. More recently successive Governments have successfully developed industrial services and tourism services. Since 1988 my Government has sought to re-dimension our services vocation to develop Malta into a financial services hub of international repute.

Our initiatives have not been without success. Financial services are fast becoming a pillar of our economy contributing to 7 % of our GDP. A number of international banks have established a presence here, most notably HSBC, Barclays, the major Austrian Banks such as Volksbank, Erste Bank, First Austrian and Investkredit, Credit Commercial de France through their shareholding in Lombard Bank plc.

International fund companies such as Barclays, Commerical Union, Lazards and Fidelity have registered both primary and secondary listings of their investment funds on the Malta Stock Exchange. Malta is being actively considered as a suitable jurisdiction for the establishment of funds, for fund administration as well as a regional center for the distribution of funds in the wider Mediterranean region.

Our success has not been coincidental. We have invested heavily in our infrastructure. Our legislative and fiscal framework, compliant with the principal EU Directives, has enjoyed the unanimous support of both sides of the House of Representatives. Malta's wide network of Double Tax Treaties (28 in all) has also provided a sound base for the tax efficient structuring of financial products. Our regulatory approach has been stringent, ensuring that it is only the quality names that are attracted to Malta. Regulatory competence is shared by the Central Bank of Malta, the Malta Stock Exchange and the Malta Financial Services Centre which, I gladly note, has been one of the sponsors of the ILF Conference.

Undoubtedly, Malta's main competitive advantage is its workforce. We boast of efficient and versatile administrative and managerial staff. Tri-lingualism is common and motivation widespread. The University of Malta, which is the oldest University in the Commonwealth outside of Great Britain, has a tradition of excellent standards and closely forged links with foreign Universities. The University also houses the International Maritime Law Institute set up under the auspices of the International Maritime Organisation and a Mediterranean Academy of Diplomatic Studies.

Political stability and infrastructural soundness, coupled with our economic track record render Malta investor-friendly and as the forthcoming European Union enlargement approaches we look forward to further economic growth as full members of the European Union.

In conclusion, having extolled the virtues of the Maltese financial centre, it would be fair to expose some of the risks in order to facilitate an objective risk-benefit analysis of investment in Malta. I must admit however that no major contras spring to mind, other than the risk posed by the charm and history of a sun drenched island which to many would be more conducive to leisure and pleasure apart from productivity and hence profitability. But that, it is assumed, is a risk most investors and their advisors would be willing to take.